SEC Concept Release on International Accounting Standards
A summary of the concept release put out by the U.S. Security and Economic Commission (SEC) on International Accounting Standards.
The paper shows that the increased globalization of companies has led to a dilemma for investors because accounting standards in various capital markets are not always reliable. It shows too that in an effort to increase the reliability of financial information in capital markets the SEC seeks to maintain the high quality of financial reporting in the U.S., while working towards establishing a high quality financial reporting structure worldwide. This paper summarizes the issues presented in the SEC’s concept release on International Accounting Standards. These issues include: the five elements of global financial reporting; exceptions to rules for foreign private issuers using accounting standards that differ from GAAP; and the three criteria for assessing the International Accounting Standards Committee.
Rigorously interpreted and applied: The development of high standards does not ensure that the standards will be upheld. In order for the standards to be practiced consistently accountants have to understand the responsibility they have in applying these standards consistently and in a manner that is needed to ensure high quality. This understanding only comes when regulators including auditors, rigorously interpret and apply these standards to accounting standards around the globe. The SEC contends that IASC standards are not used in many capital markets, which makes it impossible for them to be interpreted or applied. In addition countries that do utilize IASC standards have yet to incorporate the new changes created by the IASC.
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SEC Concept Release on International Accounting Standards. (2015, Apr 23). Retrieved September 24, 2020, from https://newyorkessays.com/essay-sec-concept-release-on-international-accounting-standards/